Non-parametric well-being comparisons

Koen Decancq and Annemie Nys

No 640598, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We study the problem of making interpersonal well-being comparisons when individuals have heterogeneous preferences. We present a robust criterion for interpersonal well-being comparisons that states that one individual is better off than another one if the intersection between the extended upper contour set of the better off individual and the extended lower contour set of the worse off individual is empty. We implement the criterion in the consumption-health space using an online survey with 2,260 respondents in the United States to investigate how complete the resulting interpersonal well-being comparison is. To chart the contour sets of the respondents, we propose a new “adaptive bisectional dichotomous choice” (ABDC) procedure that is based on a limited number of dichotomous choices and some mild non-parametric assumptions on the preferences. We find that between one fifth and half of all pairs of respondents can be ranked with the criterion.

Pages: 44
Date: 2019-07-22
New Economics Papers: this item is included in nep-hap and nep-hea
Note: paper number DPS 19.07
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Published in FEB Research Report Department of Economics

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Related works:
Journal Article: Non-parametric well-being comparisons (2021)
Working Paper: Non-parametric well-being comparisons (2018)
Working Paper: Non-parametric well-being comparisons (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:640598

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